Teva’s proposed Stada buy not to impact Indian firms

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The proposed buyout of German drug major Stada by the largest generic player Teva Pharma is not expected to hit Indian pharma firms which had signed a supply and marketing agreement with Stada in 2005.

Though Chennai-based Orchid Chemicals had tied up with Stada Pharmaceuticals Inc, the US subsidiary of Stada, the company will not be hit as the US subsidiary had been bought by US-based Dava in 2006. Also, Bangalore-based Strides Arcolabs hopes the takeover will not hit the company heavily as the deal size is small and only two products have been supplied to the parent company, Stada.

Last week, shares in Stada, Germany’s third largest generics firm, went up as much as 13% on speculation of a takeover by Teva. Stada, which makes copies of AstraZeneca’s Prilosec anti-ulcerant and Merck’s cholesterol drug, Zocor has a sales turnover of about $3 billion. In February 2005, Bangalore-based Strides Arcolab Ltd had entered into a development and supply agreement with Stada Pharmaceuticals Inc, US subsidiary of Stada. As per the deal, Strides developed and manufactured a prescription generic drug, the name of which had not been disclosed, for sale in the US. Arun Kumar, managing director, Strides Arcolab told FE, “We don’t think there will be an impact to our revenues if Stada is taken over as only two products have been supplied to them and we hope the deal can be extended with Teva also.”

In March 2005, Chennai-based Orchid Chemicals & Pharmaceuticals Ltd had entered into an exclusive agreement with Stada Pharmaceuticals Inc for the development and supply of non-cephalosporin formulations for exclusive distribution and marketing by Stada in the US market. Speaking to FE,an Orchid spokesperson said, “This does not affect us as Stada’s US business, with whom we had partnered, had been taken over by Dava in 2006 itself.” The products covering diverse therapeutic segments, including cardio-vascular, central nervous system, anti-allergic, gastro-intestinal and anti-infective categories, had US brand market size of $12.5 billion.